Japan: Apple, Google accused of unfair competition practices

A REPORT by Japan’s Economy, Trade, and Industry Ministry has accused U.S. technology giants Apple and Google of engaging in “undermining” practices when it comes to dominating the smartphone app market.

The report, seen by the Nikkei Asian Review, claims that Apple and Alphabet Inc.’s Google use their huge presence and monopoly in the market to decide the rules and regulations for app developers, which can help get rid of competitors.

While not in direct violation of Japan’s strict anti-monopoly laws, restricting the type of payment methods developers can accept and limiting pricing freedom can significantly impact the competition’s ability to progress.

SEE ALSO: Amazon Japan raided by anti-monopoly watchdog on suspicion of unfair practices

Apple decrees that app prices must be rounded to the nearest ten yen denomination in Japan, a policy that was meant to make it easier for consumers to purchase apps.

The company also imposes a 30 percent levy on all iTunes and App Store sales, reports Apple Insider, which is known as ‘Apple tax’. This too was mentioned in the report as an “abuse” of Japanese law by some members of the study group.

Nikkei reports that Apple’s refund policy is also an unfair practice according to the ministry, as it does not return the 30 percent levy to developers if customers wish to gain a refund, therefore forcing developers to pay with their own funds to cover the 30 percent charge.

A high-ranking official was quoted as saying that Japan’s Fair Trade Commission would be investigating the matter further, and “may choose to conduct on-site inspections if there is sufficient suspicion of regulation breach”.

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